Beware the cult of the heroic chief executive
John Kay wrote an article about “visionary” CEOs who bought into their own story and the need for someone to check their ego.
Domineering chief executives often fill their boards with cheerleaders, and rarely seek sceptical counsel. An army of professional advisers can hardly wait to get its hands on fees. The independence of equity analysts is compromised by their association with deal-making banks. Both analysts and journalists find their access depends on good relations with the businesses they cover. Many of the worst deals were widely applauded when announced.
The modern cult of the heroic chief executive is at the root of the problem. Greater shareholder activism may help, but the most valuable restraint would be more effective checks and balances within the company itself. “A man’s reach should exceed his grasp, or what’s a heaven for?” wrote Robert Browning, describing a recurrent theme of human behaviour.
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